Drewry: Managing liner capacity gets more difficult

Friday, April 12, 2013

The London-based shipping consultancy Drewry said "With over 40 ships of at least 10,000 TEUs due for delivery in 2013, carriers will find it increasingly difficult to manage capacity without upsetting the fragile supply-demand balance. Carriers are asking themselves where they can put these vessels without flooding the market."
Drewry said liner carriers "managed the influx of new vessels pretty well in 2012, with a small reduction of 1.6 percent in operational headhaul capacity in the three main East-West trades for the full year. Greater use of slow steaming has helped, and there was an average of 10.3 vessels assigned to weekly strings in the three core East-West trades as of January 2013, up from 10.1 last October."
But Drewry said, according to its new Container Forecaster publication, "Managing month-to-month changes to services and schedules is now a constant battle for container operators.
"By he end of April we estimate that the year-on-year capacity on three trades will have risen by nearly 1 percent. Further ahead, capacity on the headhaul will increase by 10.2 percent on Asia-North Europe and 5.5 percent on the transpacific in the second quarter," the firm said.
Neil Dekker, Drewry’s head of container research, noted “Missed sailings between October and February may have lifted average load factors in the East-West trades by between 2 percent and 5 percent, but there is no evidence that this improves the success of GRI (general rate increase) attempts over any sustained period of time. The supply-side pressures caused by new deliveries could force carriers to take more drastic measures such as suspension of whole strings. For now, the lines’ strategy seems to be one of damage limitation on a very short-term basis before the next wave of ships is delivered."
Drewry said the decisions by Evergreen to launch its new CPS2 transpacific service in May and MSC to start its stand-alone service on the Asia-East Coast South America trade this month will only add to what is already a challenging operating environment. - Chris Dupin